Oil rises, expert sees recovery

London, Nov. 21: Oil bounced above $63 a barrel on Wednesday to claw back some of the previous day’s six per cent plunge, lifted by a report of an unexpected decline in US crude inventories.

The American Petroleum Institute (API) said on Tuesday that US crude stocks last week fell by 1.5 million barrels, easing concerns for now that a supply glut is building up.

“The move yesterday was extremely sharp; after such moves you expect to have some rebound,” said Olivier Jakob, analyst at Petromatrix. “The API reported a stock draw — it is not a big one but at least it’s not a 10-million-barrel build.” Brent crude, the global benchmark, was up

$1 to $63.53 per barrel at

1202 GMT and traded as high as $63.77. US crude gained $1.01 to $54.44. But Wednesday’s bounce did little to reverse overall market weakness.

Brent has fallen by more than 25 per cent since reaching a 4-year high of $86.74 on October 3, reflecting concern about forecasts of slowing demand in 2019.

Legendary trader Andy Hall, however, believes that “oil may be poised for a recovery and Opec will probably reimpose supply cuts in the next month or two.”

“The balance of risk at this point favors some sort of recovery,” he was quoted as saying by Bloomberg. “When you know you’ve got prices in 2020 and beyond for WTI down below $60 a barrel, almost down to the mid-$50s further along the curve, I think that is essentially at the bottom,” he said. — Agencies